Drax shares rose 5.4 pence, or 1.4%, to 392p, after the company posted better than expected profits.

Earnings before interest, taxes, depreciation and amortization at Britain's largest power station surged to £180m, above analyst estimates of £165.7m. Low temperatures this winter led people to use more power and heating, lifting Drax sales.

The company also said it delayed to next year the decision to invest in a biomass plant, because of lack of clarity on government support.

"Regulatory uncertainty means development work for first dedicated biomass plant will continue into 2011 before investment case can be proven," the company said in a statement.